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June 02, 2017 at 06:30 AM
A federal court in Newark, New Jersey issued an arrest warrant for a defendant charged with insider trading and found him in contempt of two previously issued orders, according to a litigation release from the Securities and Exchange Commission.
U.S. District Judge Jose L. Linares found that Yu-Cheng Lin, also known as Believe Lin, had violated two prior orders by dissipating assets and refusing to repatriate funds. The judge imposed a $1,000-per-day sanction and ordered the clerk to issue an arrest warrant for Lin. The clerk issued the arrest warrant on May 25.
In an emergency action filed under seal on Feb. 9, and unsealed on Feb. 13, the SEC alleged that on May 5, Aug. 4 and Nov. 3, 2016, Lin traded on material inside information ahead of quarterly earnings announcements by Ubiquiti Networks Inc., a California-headquartered company where Lin had worked from approximately March 2011 until June 2015.
Lin allegedly did so by purchasing Ubiquiti common stock, call options and contracts-for-difference in brokerage accounts located in the United States and overseas. On April 3, the SEC filed an amended complaint alleging that Lin directed or controlled trading by a 34-year-old woman residing in Taipei, Taiwan who was a close associate of Lin and traded Ubiquiti securities in 2014 while Lin was working for the company.
The SEC’s amended complaint seeks permanent injunctions, disgorgement of ill-gotten gains together with prejudgment interest, and civil monetary penalties.
The court granted the SEC’s motion for a temporary restraining order on Feb. 9 and issued a preliminary injunction on Feb. 24, each of which imposed an asset freeze and ordered that Lin repatriate money obtained directly or indirectly from the illegal trading and deposit that money into the registry of the court.
SEC Orders Promoter of TelexFree Scheme to Pay Over $1.8 Million
The federal court in Boston has ordered Sanderley Rodrigues de Vasconcelos of Davenport, Florida, a defendant in SEC v. TelexFree Inc., et al., to pay more than $1.8 million, according to an SEC announcement.
The court’s order holds Rodrigues liable for over $1.83 million, including approximately $1.7 million in disgorgement and prejudgment interest and a $150,000 civil penalty.
In April 2014, the SEC charged Massachusetts-based TelexFree Inc. and TelexFree LLC, plus four company officers and four promoters of TelexFree – including Rodrigues – with perpetrating an international pyramid scheme targeting Latino communities in the U.S.
In settling the SEC’s charges, Rodrigues admitted that he was a promoter of TelexFree, appearing at TelexFree-sponsored public events and other gatherings at hotels and resorts. He further admitted that he appeared in promotional videos that were posted on YouTube and posted at least one video himself.
SEC Obtains Final Judgments Against Connecticut Advisor, CEO for Failure to Disclose Fees
The SEC obtained final judgments by consent against Connecticut-based investment advisor Momentum Investment Partners LLC (doing business as Avatar Investment Management), and its CEO, Ronald J. Fernandes, for failing to disclose to some of Avatar’s advisory clients certain fees they were being charged.
